There are two well-known economists who pushed forward the idea of eliminating cash initially: Willem Buiter, now Chief Economist at financial services behemoth Citigroup and Professor Kenneth Rogoff of Harvard University. (Buiter was a thesis advisor to current Reserve Bank of India Governor Urjit Patel, and they have authored many papers together.) Willem’s 2009 piece titled “Negative Nominal Interest Rates: Three Ways to Overcome the Zero Lower Bound” came exactly at the right time, when many advanced economies were grappling with the issue of low growth, lower-than-targeted inflation and interest rates that were close to zero, and it got much attention. I can’t resist quoting the part where Buiter shows he is aware of the reaction his proposal would cause, and then suggests how to deal with it:

“But politically, the abolition of currency would run into opposition from some of the legitimately cash-dependent poor and elderly, from those for whom the anonymity of cash is desired because they are engaged in illegal activities, and from libertarians. The first constituency can be helped, the second can be ignored and the third one should take one for the team”!

“Paying a negative interest rate on currency, or on electronic reserves at the Central bank, may seem barbaric to some. But it is arguably no more barbaric than inflation, which similarly reduces the real purchasing power of currency.”

Rogoff’s special contribution to the debate was to flesh out the idea that currency is tainted and dirty, facilitating tax evasion and illegal activity. He ended his paper thus:

“Given relentless technological advance, embodied in everything from mobile banking to cryptocurrencies, we may already live in the twilight of the paper currency era anyway. Nevertheless, given the role of paper currency (especially large denomination notes) in facilitating tax evasion and illegal activity, and given the persistent and perhaps recurring problem of the zero bound on nominal interest rates, it is appropriate to consider the costs and benefits to a more proactive strategy for phasing out the use of paper currency.”

Since these two men made their case, others have added their own powerful voices to the chorus, including former US Treasury Secretary Larry Summers (who was considered for appointment as the Federal Reserve Chairman) and Nobel Laureate Paul Krugman. Both Krugman and Summers argue that in the situation that advanced economies are faced with, there are only two choices: either have negative interest rates (along with its inescapable corollary, currency elimination), or tolerate much higher levels of inflation, so that real interest rates can be negative, even if nominal interest rates are not. Both of them prefer currency elimination to much higher levels of inflation.

Krugman foresaw the outrage these suggestions will cause, and countered it this way:

“Any such suggestions are, of course, met with outrage. How dare anyone suggest that virtuous individuals, people who are prudent and save for the future, face expropriation? How can you suggest steadily eroding their savings either through inflation or through negative interest rates? It’s tyranny!

“But in a liquidity trap, saving may be a personal virtue, but it is a social vice. And in an economy facing secular stagnation, this isn’t just a temporary state of affairs, it is the norm. Assuring people that they can get a positive rate of return on safe assets means promising them something that the market doesn’t want to deliver – it’s like farm price supports, except for rentiers.”

Advanced economies

This chronology of how the idea developed also gives us a good window to where one of the primary drivers in the war on cash, Central banks in advanced economies, are coming from. They are trying to perfect the primary tool they have, so that they can use if effectively in the current situation they are faced with – as well as in similar situations that may arise in the future. In fact, many are comparing the idea of currency elimination to the giving up of the Gold Standard during the Great Depression of the 1920s, which helped many economies revive.

These ideas are gaining momentum. Denmark, for example, is predicting that it will eliminate cash by 2030. In Italy and France, it is illegal to make purchases exceeding 1,000 Euros in cash. In Spain the limit is 2,500 Euros. Last year, European Central Bank decided to stop printing and issuance of the 500 Euro note, though already existing notes will continue to be legal tender for ever.

At a conference that was held in London on May 18, 2015 titled “Removing the Zero Lower Bound on Interest Rates”, Buiter and Rogoff were the keynote speakers, and other speakers represented the central banks of Switzerland, Europe, US, Denmark and Sweden, Soros Fund Management, insurance company Generali, Asset Management Company Brevan Howard and so on. So by 2015, the war had already been joined by many financial service behemoths who had begun to see the gains to be had from pushing currency out of the system. And by October 2015, the International Monetary Fund itself had released a paper titled “Breaking Through the Zero Lower Bound.”

Emerging economies

However, a key part of the war on cash will happen not in advanced economies, but in emerging markets in Africa such as Nigeria or in Asia such as India. This is because these markets are seen as holding the biggest potential for business gains and gross domestic product growth. There is also a belief that emerging markets are where new digital financial technologies will evolve, by leapfrogging the stages that the advanced economies had to go through. This possibility exists because while the difference in income levels between advanced economies and emerging economies is impossibly high, the difference between them in terms of mobile penetration levels and availability of bank accounts is much less, and these two are the essential infrastructure necessary for the move towards cashless. In the words of Bill Gates:

”One interesting feature of digital financial innovation is that some of it is happening in poor countries first… entrepreneurs in developing countries are doing exciting work – some of which will “trickle up” to developed countries over time.”

One could say the first concrete expression of this belief was the creation of an organisation called the Better than Cash Alliance in 2012, hosted at the United Nations in New York and funded by the United States Agency for International Development (commonly known as USAID), Bill and Melinda Gates Foundation, Citi Foundation, Ford Foundation, Mastercard, Omidyar Network and Visa Inc. The United Nation’s Capital Development Fund serves as the secretariat. The Alliance states its goals as advocating for the transition from cash to digital payments; conducting research; and catalyzing the development of inclusive digital payments ecosystems in member countries. What is worth noting is that the Alliance has 24 member countries, ranging from Kenya to the Philippines to Vietnam. India joined it on September 1, 2015.

Why 2015? Because in the previous year, during their bilateral meeting, Modi and US President Obama had discussed solutions to financial inclusion and the decision to join the Alliance can be seen as one result of that discussion. It was announced in the January 25, 2015 Joint Statement by the two, during Obama’s visit for the Republic Day.

Prime Minister Narendra Modi and the Chief Guest US President Barack Obama at the 66th Republic Day Parade 2015, in New Delhi on January 26, 2015.

But there were other steps too. 2015 in fact can be seen as a major watershed in India’s move towards cashless, in terms of acceptance of the principle. In his Union Budget speech in 2015, Finance Minister Jaitley said:

“One way to curb the flow of black money is to discourage transactions in cash. Now that a majority of Indians have or can have, a RUPAY debit card, I propose to introduce soon several measures that will incentivise credit or debit card transactions and disincentivise cash transaction.”

In June 2015, the finance ministry put up a draft proposal on its website, recommending tax concessions to reduce the cost of credit, debit and online payments. In July 2015, 11 new payment bank licences were given out, including one for PayTM. In November 2015, a Memorandum of Understanding was signed between the Ministry of Finance and USAID – the same agency behind the Alliance – to start working on interoperable digital payment models to drive transactions that involve small businesses and low-income consumers.

If 2015 was a year when the idea of a cashless economy was wholly accepted, much of the real action started in 2016. In February 2016, the prime minister chaired a Cabinet meeting that decided to “discourage transactions in cash”, and “shift the payments ecosystem from cash-dominated to non-cash/less cash payments”. The Cabinet decision was followed by the establishment of a task force in April 2016, which was asked to recommend short-term measures to promote payments through cards and digital means. In his Mann Ki Baat address in May 2016, the prime minister even made a call for a move towards a cashless economy – as the “whole world” was doing. The task force made its recommendations within three months, in July 2016. The very next month, August, saw the creation of the Committee on Digital Payments headed by former Finance Secretary Ratan P. Watal.

On October 14, 2016, USAID, one of the founding partners of the Better Than Cash Alliance, announced the launch of a new initiative called Catalyst to drive cashless payments in India. According to the USAID press release:

“This launch marks the next phase of partnership between USAID and India’s Ministry of Finance to help catalyze the rapid adoption of digital payments in India as a step towards achieving Prime Minister Narendra Modi’s vision of universal financial inclusion to end ‘economic untouchability’ in India.”

The CEO of Catalyst, Badal Malick, described the organisation’s objective this way: “Catalyst’s mission is to solve multiple coordination problems that have blocked the penetration of digital payments among merchants and low-income consumers…”

“The rubber is about to hit the road,” Malick said during the launch of Catalyst.

And it did.

Less than a month later, Modi announced demonetisation, the kind of push to cashless economy that no government anywhere had so far given.

The right machine can save water, power consumption, time, energy and your clothes from damage.

In 2010, Han Rosling, a Swedish statistician, convinced a room full of people that the washing machine was the greatest invention of the industrial revolution. In the TED talk delivered by him, he illuminates how the washing machine freed women from doing hours of labour intensive laundry, giving them the time to read books and eventually join the labour force. Rosling’s argument rings true even today as it is difficult to deny the significance of the washing machine in our everyday lives.

For many households, buying a washing machine is a sizable investment. Oddly, buyers underestimate the importance of the decision-making process while buying one and don’t research the purchase as much as they would for a television or refrigerator. Most buyers limit their buying criteria to type, size and price of the washing machine.

Visible technological advancements can be seen all around us, making it fair to expect a lot more from household appliances, especially washing machines. Here are a few features to expect and look out for before investing in a washing machine:

Cover your basics

Do you wash your towels every day? How frequently do you do your laundry? Are you okay with a bit of manual intervention during the wash cycle? These questions will help filter the basic type of washing machine you need. The semi-automatics require manual intervention to move clothes from the washing tub to the drying tub and are priced lower than a fully-automatic. A fully-automatic comes in two types: front load and top load. Front loading machines use less water by rotating the inner drum and using gravity to move the clothes through water.

Simple steps to get the best from your washing machineSimple steps to get the best from your washing machineSimple steps to get the best from your washing machine

Size matters

The size or the capacity of the machine is directly proportional to the consumption of electricity. The right machine capacity depends on the daily requirement of the household. For instance, for couples or individuals, a 6kg capacity would be adequate whereas a family of four might need an 8 kg or bigger capacity for their laundry needs. This is an important factor to consider since the wrong decision can consume an unnecessary amount of electricity.

Machine intelligence that helps save time

In situations when time works against you and your laundry, features of a well-designed washing machine can come to rescue. There are programmes for urgent laundry needs that provide clean laundry in a super quick 15 to 30 minutes’ cycle; a time delay feature that can assist you to start the laundry at a desired time etc. Many of these features dispel the notion that longer wash cycles mean cleaner clothes. In fact, some washing machines come with pre-activated wash cycles that offer shortest wash cycles across all programmes without compromising on cleanliness.

The green quotient

Despite the conveniences washing machines offer, many of them also consume a substantial amount of electricity and water. By paying close attention to performance features, it’s possible to find washing machines that use less water and energy. For example, there are machines which can adjust the levels of water used based on the size of the load. The reduced water usage, in turn, helps reduce the usage of electricity. Further, machines that promise a silent, no-vibration wash don’t just reduce noise – they are also more efficient as they are designed to work with less friction, thus reducing the energy consumed.

Customisable washing modes

Crushed dresses, out-of-shape shirts and shrunken sweaters are stuff of laundry nightmares. Most of us would rather take out the time to hand wash our expensive items of clothing rather than trusting the washing machine. To get the dirt out of clothes, washing machines use speed to first agitate the clothes and spin the water out of them, a process that takes a toll on the fabric. Fortunately, advanced machines come equipped with washing modes that control speed and water temperature depending on the fabric. While jeans and towels can endure a high-speed tumble and spin action, delicate fabrics like silk need a gentler wash at low speeds. Some machines also have a monsoon mode. This is an India specific mode that gives clothes a hot rinse and spin to reduce drying time during monsoons. A super clean mode will use hot water to clean the clothes deeply.

Washing machines have come a long way, from a wooden drum powered by motor to high-tech machines that come equipped with automatic washing modes. Bosch washing machines include all the above-mentioned features and provide damage free laundry in an energy efficient way. With 32 different washing modes, Bosch washing machines can create custom wash cycles for different types of laundry, be it lightly soiled linens, or stained woollens. The ActiveWater feature in Bosch washing machines senses the laundry load and optimises the usage of water and electricity. Its EcoSilentDrive motor draws energy from a permanent magnet, thereby saving energy and giving a silent wash. The fear of expensive clothes being wringed to shapelessness in a washing machine is a common one. The video below explains how Bosch’s unique VarioDrumTM technology achieves damage free laundry.